"The Crisis Has Become Pandemic" - System To Collect Defaulted Student Loans Is No Longer Functioning

Tyler Durden's picture

The system used by the Dept. of Education to collect on defaulted student loans came to a standstill in the last month, leaving an estimated 91,000 accounts in limbo, when the agency ordered debt collectors under contract to stop making collections on accounts.

As Consumerist's Ashlee Kieler reports, consumers who expected their student loan payments to be deducted from their bank accounts this month have reportedly found the funds untouched, and their calls to the companies unanswered thanks to a Department of Education’s order prohibiting the debt collection companies from working on default accounts in response to two lawsuits against the agency.

The strange turn of events began with a lawsuit filed by two debt collection companies, who claim they were unfairly were fired by the Obama-era Education Department for poor performance. On March 29, the judge issued a temporary restraining order that prevented any new defaulted borrowers from being assigned to debt collectors and put into rehabilitation programs. Instead, the borrowers have piled up inside the department's system, waiting.

On April 21, the government ordered the debt collectors involved in the suit to stop work altogether on defaulted accounts: no phone calls, no withdrawals from student accounts, nothing.

The Education Department and the Justice Department are partly to blame for "unnecessarily" throwing a wrench into the entire defaulted loan system, one attorney with knowledge of the case told BuzzFeed News, because they've been unable to come to a resolution that allows the loan system to kick back into gear. "There's no fix in sight."

Judge Susan Braden has extended the emergency order [PDF] several times since then, noting that it was made to “preserve the status quo to protect the interests of all parties and to afford the government an opportunity to reach a global solution” to two lawsuits against the Dept. of Education.

The cases, filed separately by several debt collection firms, claim that the Dept. of Education unfairly terminated their contracts with the companies.

More recently, the Dept. of Education ordered servicers to stop work on defaulted accounts. The actions, the companies argued in court filings [PDF], “fundamentally alter the status quo and are not fiscally responsible to the borrowers or to the federal taxpayers.”

“Thus, the well-documented student loan crisis will become a pandemic not because this Court ordered that result, but because [Dept. of Education] thinks that is what this Court expects,” the companies argue.

This week, the Dept. of Education submitted a court filing detailing how the Judge’s order and its subsequent suspension of collection activities has affected consumers, Career Education Review reports.

The Dept. claims that the action “has effectively shut down the Government’s defaulted student loan collection program,” with an estimated 91,000 borrowers now stuck in limbo because their accounts weren’t assigned to a debt collector in April.

Additionally, the Dept. argues that by not assigning borrowers to collectors “tens of thousand of borrowers have been prevented from gaining access to rehabilitation programs” and other benefits.

BuzzFeed News reports that debt collection agencies say that since the Department ordered a stop to collection activities they have been inundated with calls from borrowers.

However, the companies can’t help the customers. This, they claim, has resulted in thousands of messages and complaints from borrowers.

The collectors, BuzzFeed reports, claim that because of this borrowers will re-default and those enrolled in repayment programs could lose their eligibility.

Suzanne Martingale, policy staff attorney for our colleagues at Consumers Union, tells Consumerist that the stop in collections and payments could do “untold damage to borrowers.”

“Meanwhile, they’re going to rack up a ton of charges as more interest accrues on their loans,” she adds.

As the work stoppage drags on, consumer protection advocates are confused about where borrowers stand, especially given a tangle of other lawsuits involving the loan companies and the government. "The whole process has been completely mind-boggling," said Persis Yu, the director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, who called the standstill "mystifying from a consumer protection standpoint."

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VWAndy's picture

 No way! lol


HopefulCynical's picture

We don't need no water...

max2205's picture

Govt health care is bound to work better.....right?

JackT's picture

See everyone. It's just that easy. When there is too much debt to collect from those who don't have the money, just shut down the collection. Problem solved.

VWAndy's picture

 This is how fiat crack heads think. Really. The answer to everything is another hit on the ol fiat crack pipe.

NoDebt's picture

It's not just unpayable debt, it's now debt you can't even pay.

(That sentence still makes no sense to me, but I think it's accurate)


JackT's picture

It really is perfect

philipat's picture

So this probably results in the last source of "consumer credit" (a/k/a student loans) drying up completely. It would be really interesting to know (but nobody involved wants to find out, after all it's only taxpayers' money) the real disposition of "student loan" funds, but it is clear that a substantial part of it has nothing to do with study?

D Nyle's picture

Wow, The Government FUCK-UP, I'm shocked, Just shocked

StackShinyStuff's picture

Poor fucking snowflakes get a reprieve.

zimboe's picture

I read that as a "108 dollar" lawsuit.


Stuck on Zero's picture

The judge said something about squeezing blood out of turnips.

AldousHuxley's picture

Government doesnt' have quarterly wall st. expectations to meet. They can garnish your social security benefits 40 years later once they figure it out. Plus you owe gov interest, so longer it takes more revenue for the People's Monopoly Deep State Inc.

NoPension's picture

It's not " taxpayers' " money.

It's Monopoly money, created out of thin air. A dollar is worth 4cents, the quicker it evaporates...the quicker we move on.

.....then again, be careful what I wish for.

I've heard it said, all the money collected from "taxpayers" barely covers the debt.

PT's picture

What if? ..... What if, the people assigned to collect the student debt, what if they also had student debt???   *Gasp!*

Just a thought.

boattrash's picture

Speaking of taxpayers, can we expect the courts to enact the same type of plan for the IRS?

Arnold's picture

It is still 1.5 % of the revenue.
Others will document.
Thank you others.

Radical Marijuana's picture

CORRECT, NoPension!

Psychotic breakdowns of the MAD Money As Debt systems, based on being able to enforce frauds, while exponentially advancing technologies have enabled that to be MADNESS which became exponentially increasing fraudulence, have long ago left the supposed "taxpayers" behind in the dust ... So-called "student loans" are simply symbolic of the ways that "money" created out of nothing as debts, through public governments enforcing frauds by private banks (where that "money" did not exist until the student agreed to "borrow" it), have become the biggest single "asset" on the balance sheet of the government of the USA, which is itself stuck inside an overall condition of runaway debt insanities.

The total ability to enforce frauds has resulted in the virtual world of fictitious finance to have become more than 100 times greater than the physical economy. The days are long gone when "taxpayers" were relevant to enabling the combined monetary and taxation systems to operate as frauds by private banks which were enforced by governments. Indeed, one SHOULD be careful what one wishes for with regard to going through the series of psychotic breakdowns which would theoretically necessary for the relatively objective physical and biological facts to correct the social "realities" which have become based on globalized electronic monkey money frauds, backed by the threat of force from apes with atomic weapons.

Flesh and blood individuals, such as "taxpayers," are NOT even remotely close to being in the same order of magnitude as the previously inanimate energy sources, which have effectively been animated by automated electronic frauds, similarly to how those flesh and blood people have been exceeded by the astronomically amplified sizes of weapons of mass destruction.

While the relatively small hiccups with respect to student loans, such as in the story above, are comparatively trivial, those are combining together into the overall patterns of runaway MADNESS, necessarily headed towards PEAK INSANITIES. It is politically impossible to resolve those issues within their own frame of reference. Any old-fashioned notions of student "responsibilities" for being born into runaway debt insanities are not going to work:


Trump Administration Rolls Back Obama Protections On Student Loans

I also posted as Radical Marijuana under:


America’s Student Debt Problem Is Much Bigger Than Anybody Realized


Why Seven Million Student Loan Defaulters Are In A Standoff With Uncle Sam

"The Fish Rots From The Head."

Student loans are rotten tail fins.

It is barely possible to exaggerate the degree to which the banksters' bullshit about the political economy dominates public debates regarding these issues, where the notions of "investing" in education become problematic to the point of being ridiculous, because ALL of the traditional ideas regarding "investing" have become similarly ridiculous, for similar reasons.

"Capitalistic free markets," in which people are productive, and save, and reinvest their savings, have been almost totally destroyed by the international banksters being able to globalize their systems whereby governments enforce frauds by private banks. That kind of public "money," made out of nothing as debts, has some profound reasons for WHY that kind of "money" EXISTS and dominates the global political economy.

Most of those who want to believe in the banksters' bullshit about "free market capitalism," and its associated idealized attributes, such as "sound and honest money," do NOT understand, and do NOT want to understand WHY the abstract theories of "free market capitalism," and its associated attributes, were special case, reductionistic views of the overall ways that human beings and civilization live as entropic pumps of environmental energy flows, which necessarily match the principles and methods of organized crime.

Most of those who "tut-tut" about the perception of the apparent moralities regarding student "loans," (which are merely more of the basic systems that create "money" out of nothing as debts, when those students "borrow" that "money," which did NOT exist until it was "borrowed") IRONICALLY continue to mostly still "think" through using the banksters' bullshit language regarding the political economy. The most common practices are to criticize that situation using the banksters' bullshit world view, made through the DUALITIES of false fundamental dichotomies, and the related impossible ideals. For instance, the typical uses of labels such as Socialism or Communism, etc., in ways which have nothing in common with either the dictionary definitions of those labels, nor the actual FACTS.

"Free market capitalism" ONLY EXISTS as a special case of civilization operating as fractal patterns of organized crime. Similarly, every other "-ism" or "-ocracy" manifests within the overall context that human beings and civilization are manifestations of general energy systems, which live by being entropic pumps of environmental energy flows, which must match the principles and methods of organized crime. Since most of those who believed in the banksters' bullshit, and wanted to continue to believe in that bullshit, were brainwashed to NOT understand and NOT want to understand that "free market capitalism" must have been a special case, under particular circumstances, whereby civilization still operated according to the principles and methods of organized crime, that level of deliberate ignorance and willful blindness facilitated the almost total destruction of "free market capitalism" by the MAD Money As Debt systems, depending upon public governments to enforce frauds by private banks, such that the excessively successfulness of doing THAT enabled the profits from frauds to be reinvested in more frauds, in order that, overall, there has been exponentially increasing FRAUDULENCE, which has been almost totally globalized.

"Borrowing money" that does NOT exist until that is "borrowed" is what Student "Loans" ARE, the same as almost all other "loans." According to the banksters' bullshit world view, that kind of "money" is still publicly presented as if that were "POSITIVE CAPITAL." HOWEVER, MAD Money As Debt is actually NEGATIVE CAPITAL, which has effectively annihilated "free market capitalism" on a globalized scale.

The essential issues were that the ideals regarding "free market capitalism" tended to deliberately ignore the ultimate "free market" which was the history of warfare operating as a kind of "free market in murder." Similarly, those who are concerned about "human labour" tended to deliberately ignore the most important labour, which was when some people worked to try to kill other people. (The industrialization of that has been the leading way in which industrialization in general has overwhelmed any old-fashioned notions regarding human labour and voluntary exchanges of things made by human labour.) In my view, when looked at in over-simplistic ways, the idealized notions about "free market capitalism" most closely correspond to the idealized notions regarding human beings and civilization living as entropic pumps of environmental energy flows. Hence, to that degree, "free market capitalism" tends to be a better idealized system than other varieties of idealized systems. However, almost NONE of the profound progress in understanding general energy systems, such as enabled industrial revolutions, and the animating of previously inanimate energy sources, has yet been systematically applied in any publicly significant ways to political economy, since the EXISTING political economy IS based on globalization of the banksters' bullshit world views.

The same basic concepts continue to apply outside of any idealized "rule of law," which is theoretically necessary for there to actually be any idealized "free market capitalism." (Which would include any idealized notions about "investing in education.") Indeed, the only connections between human laws and natural laws are the abilities to back up lies with violence. The political economy operates INSIDE the human ecology, (which operates INSIDE the overall environment.) In general, the debt controls are backed by the death controls, and that, of course, includes student "loans," just as much as the globalized electronic "money." The almost exponential progress in physical science has enabled systems actually based upon enforcing frauds to become exponentially more fraudulent. The previous systems of paper money frauds, backed by gunpowder weapons, have become globalized electronic money frauds, backed by the threat of force from atomic weapons.

Meanwhile, pretty well NONE of that progress in understanding other energy systems has been properly applied to better understanding human energy systems, because doing so requires going through series of intellectual scientific revolutions, and profound paradigm shifts, whereby the results are radical truths that human beings and civilization, because they live as entropic pumps of environmental energy flows, necessarily follow the principles and methods of organized crime, which cascade throughout civilization in fractal patterns.

Since "the fish rots from the head,"

student loans are the rotten tail fins.

The deeper aspects of that are due to the ways that civilization has always been based on being able to enforce frauds, despite that being able to enforce frauds never stops those from still being fundamentally fraudulent. The prodigious progress in physical science and technology has been applied through those systems to become many orders of magnitude better at enforcing bigger frauds, BUT, BUT, BUT, doing so never resolves the underlying essential problems that those frauds are still fundamentally false. Since civilization was always based upon being able to back up lies with violence, the biggest bullies' bullshit world views became the overwhelmingly dominate social stories, such that the vast majority of people, for generation after generation, were taught to "think" using the biggest bullies' bullshit languages, as well as to take for granted the bullies' preferred philosophical presumptions, despite all of that tending to become as absurdly backwards as humanly possible.

Student Loans are relatively trivial aspects of


fake "education" for fake "democracy."

That is the overall context in which the series of articles on
Zero Hedge regarding "Student Loans" played on through.

& posting under the name "Radical Marijuana," I added
my kinds of critical comments under all of these here:


The Next Subprime Crisis Is Here: Over $120 Billion In Federal Student Loans In Default


The Student Loan Bubble In 19 Simple Charts


What Student Loans Are Really Spent On


Here Comes The Student Loan Bailout


Matt Taibbi On "The Dirty Little Secret" Inside The Student Loan Bubble


USA Federal Student Loans Surpass $1 Trillion; Their Delinquency Rate Soars To All Time High


Student Loans Soar To Record $1.111 Trillion, Up 12% In Past Year


Obama Unveils Student Loan Debt Bubble Bailout


Taxpayers To Lose Billions On Student Loan Refinancing

Paradoxically, what young people actually "need" is some radical education toward some revolutions. However, of course, what they actually receive is more indoctrinations from professional hypocrites. "Student Loans," as more "money" made out of nothing as debts, which does not exist until the students agree to "borrow," are obnoxious symbols of the overall ways that we are living inside of debt slavery systems, generating numbers which are becoming debt insanities, which debts tend to mostly be transferred onto young people and possible future generations. However, the standard patterns of publicly significant responses to that tend to be, first, that most people do not understand MAD Money As Debt systems. Secondly, those few do begin to understand that MADNESS still want to resolve that by proposing and promoting bogus "solutions," which still stay inside "thinking" using the banksters' bullshit view of the political economy.



That is the context in which "Student Loans" operate, as overall relatively trivial manifestations of THAT, when considered on the globalized scales of electronic money. From that overall perspective, although "Student Loans" are symbolically significant, particularly with respect to their eventual future consequences, those "Student Loans" are relatively trivial aspects of the MAD Money As Debt systems, backed by the more MAD Mutual Assured Destruction systems. Indeed, those problems are so severe, as well as automatically getting worse, faster, that it is not clear how any students with loans, which are merely some of the tips of the rotten tail fins of the overall totally rotten globalized political economy, could do anything which is personally practical for them, other than act like most of the older, richer people around them, by maximizing their debts, despite that contributing to the probable destruction of their futures, since it appears to be politically impossible to do anything else.

People who personally believe that they are not indebted are still stuck INSIDE the MAD Money As Debt systems, just merely not so deeply. However, given the entrenched existence of that MADNESS, those who are most able to take advantage of that MADNESS, by accessing the most "money" made out of nothing as debts, tend to benefit the most from their position inside that MADNESS. From that perspective, those taking out "Student Loans" are like trivial Hedge Fund Managers, or any other example of those who personally benefit from being able to have provided the banksters with apparently justifiable excuses to make more "money" out of nothing as debts, and give it to them to spend. "Investing" in bullshit-based education is probably not that much worse than many other kinds of mal-investments enabled by those who are able to provide banksters with justifiable excuses to make more "money" out of nothing, to "pay" for strip-mining the planet's natural resources.

The essential problems that civilization faces, which are proportionately worse for the younger, and for possible future generations, are the degree to which civilization has been able to go through prodigious progress in physical science and technology, while almost NONE of that was accomplished in political science, but rather, the advancing technologies were primarily applied through an oxymoronic scientific dictatorship, in order to become better at enforcing frauds, thus enabling civilization to continue to become exponentially more fraudulent ... Meanwhile, in that overall context, it is not at all clear what benefit there actually is in genuinely learning to be able to become more open minded, and think more critically. Rather, the consequences of doing so then tend to become as H.L. Menchen stated:

"The most dangerous man, to any government, is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost invariably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And if he is not romantic personally, he is apt to spread discontent among those who are."

The important things which governments DO,

that are dishonest, insane and intolerable,

are ENFORCE FRAUDS by private banks.

One of the overall relatively minor ways that is done is through creation of Student Loans.

& I repeat that most people do NOT understand that such loans are due to enforced frauds.

Moreover, the few that do then tend to continue to promote bogus "solutions" based upon the impossible ideals, as expressed through the false fundamental dichotomies, as developed by the banksters' bullshit regarding the political economy. What young people, and even more so, possible future generations, should be better educated to understand are the principles and methods of organized crime, because that is the way to approach genuinely better understanding of human beings and civilization necessarily living as entropic pumps of environmental energy flows.

The currently existing globalized Neolithic Civilization IS almost totally based upon governments being the biggest forms of organized crime, controlled by the best organized gangs of criminals. I.e., bankster dominated governments, surrounded by layers of controlled opposition groups, who all stay within the same bullshit-based frame of reference. Those are the real problems that young people should be better educated to understand, and by "better" that means NOT taught to "think" about that in absurdly backward ways by "teachers" who are professional hypocrites.

Above, I have outlined my interpretation of the deeper reasons "Why Seven Million Student Loan Defaulters Are In A Standoff With Uncle Sam" ... (which the article above today merely adds another wrinkle to) ... Students, whether they like it or not, and regardless of to whatever degree that they do, or, more likely, do not, understand their situation, are trapped within the runaway debt slavery systems that they were born into, as well as their parents and parents' parents were also born into. Those runaway debt slavery systems MUST continue to double down on their total debts, in order to continue to exist in the ways that they have previously been able to exist, for generation after generation. That is WHY President Bush II presided over America doubling its total debts, and then President Obama also presided over American continuing to double it total debts. Nothing else is possible with the entrenched MAD Money As Debt systems than exponentially more debts. If President Trump does not preside over the total American debts continuing to double at about an exponential rate (as those have doubled since 1971), through whatever excuses are possible to allow that to happen, then the entire system would collapse into chaos ... Every way in which debt insanity cans are kicked on down the road means that the potential for greater eventual psychotic breakdowns thereby increases!

That is how and why the banksters continue to develop every possible excuse that they can to make more "money" out of nothing as debts, which included the increasing level of American Student Loans, and all of the resulting distortions and dislocations. However, overall, those are relatively trivial aspects of the greater globalized context of mis-allocations of Negative Capital, treated as if that were Positive Capital ... The younger you are, and even more so for possible future generations, the less likely it becomes that you will be able to continue to live inside of the currently established systems being able to continue to double down, because every doubling becomes ever more flabbergasting levels of exponentially increasing FRAUDULENCE!

However, the deeper levels of realistic "truths" tend to be nothing like the bogus "solutions" which continue be based upon taking for granted the banksters' bullshit world view regarding the political economy, which tends to deliberately ignore and be as willfully blind as possible towards the FACTS THAT MONEY IS MEASUREMENT BACKED BY MURDER. Theoretically speaking, young people should become better educated. However, actually doing so would require becoming educated regarding series of intellectual scientific revolutions, and profound paradigms shifts, because younger people, and even more so for possible future generations, are necessarily being driven towards some variety of "revolutionary" circumstances, in one way or another, sooner or later ...

It has become too politically impossible for the entrenched MAD Money As Debt systems to be sufficiently "reformed." Rather, the overall consequences of that MADNESS continue to get worse, faster, at about an exponential rate ... Hence, we are rushing toward some sorts of "revolutionary" transformations ... It would probably be better for young people to generally become more genuinely educated, because then they MIGHT be able to understand what is really happening. However, for them to do that, then they would have to develop a more conscious appreciation of how and why most of their teachers had become the best available professional hypocrites, who had careers which adapted to living INSIDE ENFORCED FRAUDS, without ever publicly admitting and addressing THAT, despite the overall exponentially increasing FRAUDULENCE that was accumulating.

Reichstag Fire Dept.'s picture


Down vote for the wordiness and excessive links that are pro'ly equally as wordy...I'm a busy man.

clinically alive's picture

Radical Marijuana keeps copypasta'ing a comment he made like last year. I'm not sure why he thinks new visitors on the site are gonna bother reading his essay, when nobody's upvoting it anymore.

CrimsonAvenger's picture

Dude. Nobody is gonna read that.

HalinCA's picture

This year the interest payments on the national debt are over $500,000,000,000 ... 1/2 a trillion for interest ... 


Sick Underbelly's picture

When the shit goes down, please try to remember the "battle" should be against those who got us here...bankers, all Federal Reserve lynchmen, every kretin in the Senate and House, pedophiles, large-cap former and current CEOs, top leadership and boards, and all Supreme Court swindlers and their "interpretive" ilk.

Your neighbor, no matter how stupid--unlesss they are one of the above--is not your enemy.  It will take a lot of hunting to track down the fuckers running this hypothecation swindle, and the only way to lose is fighting amongst ourselves.


Four chan's picture


this only concerns those (((holders))) of the debt, the principal and interest of which (((they))) created out of thin air.


HalinCA's picture

So you think the debt holders - if they have to write it down - won't pull down the rest of the financial world?


INTJ Economist's picture

it's NOT taxpayer money, cunt.  your taxes pay for nothing at the federal level.  think about it.  i have the power to create money via keystrokes on a keyboard and i need your taxes to pay for shit?!  give me a fucking break.  you pay for nothing.

cheka's picture

irs and frbny have it covred.  WE will pay for the weed, booze, and nachos bell grandes

44magnum's picture

We pay for our slavery and its expensive.

ebworthen's picture

$11+ Trillion of gravy to Wall Street and banks/corporations/insurers with no consequences.

Why would anyone with student debt pay?  Because they like to bend over for .gov and the banksters!?

Money is free.  No such thing as money or debt anymore.  If you did not understand this post 2008-2009 you never will.

SolidAssets's picture

she was a waitress in a cocktail bar now she owns a jet... http://bit.ly/2jdTzrM

serotonindumptruck's picture

How does the old adage go?

Debt that cannot be repaid, won't be.

Perhaps this is a small precursor to an overall debt jubilee as the world reserve currency is nearing collapse.

Now I understand why Bernie Sanders was so popular with millenials.

"Do you mean to say that I can borrow $200,000 for a Masters Degree in Anthropology, and I can skip class 75% of the time while failing all of my undergrad prerequisites, while I party my ever-lovin' ass off with all the booze and drugs that I can stand, and I STILL DON'T have to pay back my student loan?

Holy shit, dude! Sign me up!"

DaveA's picture

A community college in New Jersey was recently busted for signing up hobos for student loans. The school got tuition money while the "students" got a $700 biweekly stipend whether or not they bothered to show up for class.

philipat's picture

The surprise is that they got busted? Probably in one of the "affirmative" jurisdictions?

CNONC's picture

About 8 years ago I sold a paint booth to a technical college in eastern Kentucky.  When I arrived to install it, the school was a bustling, crowded campus.  Three days later, it was a ghost town.  No students, few instructors, empty parking lots, yet it was the second week of the semester.  The automotive body repair instructor explained that virtually all students received Pell grants.  The checks were distributed in the second week of each semester.  Once they received their checks, the students had no further reason to show up. The instructor in the body shop was running his own business out of the college, using high end equipment (in this case, a top of the line SAICO downdraft paint booth) bought by the state. 

fajensen's picture

Cool. I'd like to work there!!

blueberry100's picture

Additionally, the Dept. argues that by not assigning borrowers to collectors “tens of thousand of borrowers have been prevented from gaining access to rehabilitation programs” and other benefits.


Can anyone tell me what this really means????

SolidAssets's picture

she was a waitress in a cocktail bar now she owns a jet... http://bit.ly/2jdTzrM

CC Lemon's picture

Logistically and financially impossible to pay yet still legally responsible.

That's like finding out you're really banging a tranny with two dicks.


Reichstag Fire Dept.'s picture

Not understandable, yet acurate.

That's about as much sense as anything makes in markets these days anyways.

rpboxster's picture

It's not how fast you mow, it's how well you mow fast.

NiggaPleeze's picture

Slight correction to the article, which claims the Dept. of Education "unfairly terminated their contracts with the companies".  That's not quite right, what the DoE did was not award a contract to one bidder due to (alleged or actual) problems with its bid proposal.  The bidder appealed this decision and this is supposed to put a "stay" on the government awarding the contract.  Well, obviously when the contracts deal with collecting student loans you can't just "stop the process" for months on end while this issue is resolved, so the DoE started awarting the collection activities to existing vendors (instead of the new contract which was bid out).  The (losing) bidder then filed a complaint with the court, arguing the DoE was "circumventing" the stay by having the accounts processed.  And the dumb-arse judge agreed with this!  In her (clueless) opinion, she wrote:

Regarding the fourth factor, the balance of hardships weighs in favor of Continental Services. Courts have generally recognized that any harm to the Government caused by delay in performance is generally less significant than the harm caused to the bid protestor.

That is about the most pathetic analysis of "balance of hardships" imaginable.  She didn't even analyze the harm in this particular case, just writing that "in general" it's better to delay a contract than have someone else service it.  This is the kind of morons we have sitting as dictators on our federal judiciary (this particular moron was appointed by the Shrub). 

NoDebt's picture

Great explainer.  Thank you for that.

Wait until it's 2 years from now and they still haven't turned the system back on.


New_Meat's picture

Frances Fox Piven smiles, has another gin-soaked raisin, and takes a toke.

Son of Loki's picture

"We want Moar!"


~ Millennial Joe

The Ram's picture

I love seeing government failure.  We can only pray that it collapses into one hopeless pile of shit.  I am not sure what comes next. but the destruction of an unsustainable system is natures way of moving on.  I always have a warm heart when bankers start jumping out of windows....or may be pushed.

ACMeCorporations's picture

It's just the judicial branch wanting to demonstrate that their unintended consequences can be as dire as those of the legislative branch.

AtATrESICI's picture

a clinton foundation donor or friend of the chocolate jesus will collect. there is always an angle.